REG - System1 Group PLC - Review of strategic options

System1Announcement

31/08/2022 07:00

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RNS Number : 6663X  System1 Group PLC  31 August 2022

31 August 2022

System1 Group PLC (AIM: SYS1)

 ("System1", or "the Company", or "the Group")

 

Review of strategic options for increasing shareholder value

 

Following a review of the Company's recent performance, the board of the
Company (the "Board") has decided to conduct a review of its strategic options
for growing the business and increasing shareholder value (the "Review").

 

In recent years the Company has invested significantly in developing and
launching the "Test Your…" marketing technology platform which provides
automated predictions on the effectiveness of advertisements (Test Your Ad),
innovations (Test Your Idea) and brand strength (Test Your Brand). In
addition, System1 has reshaped much of the business, automated many of its
products, raised its industry profile and developed a management team capable
of achieving its goal of becoming the world's marketing decision-making
platform.

 

The current strategy has led to significant growth in Test Your Ad revenues
for the Group, and the launch of additional products such as Test Your Brand
and Test Your Idea. System1 has also developed partnerships with companies
including ITV, LinkedIn, Globo and a number of creative agencies to increase
the number of customers that benefit from its automated prediction products.
At the same time, the Group's revenue from its historic bespoke consulting
services has been impacted as customers convert to the faster, cheaper
standard products.

 

The Company estimates that its target markets of predicting and improving
advertising, brand and innovation effectiveness represent about $10bn of the
ca $90bn spent annually on market research according to ESOMAR (esomar.org).
Currently with the Company having less than a 1% share of its target market,
the Board believes that System1 is very well placed to enjoy significant
growth in the next decade.

 

Whilst the Company can continue with its current strategy, the Board believes
that it is important to ensure that it has explored all strategic options to
capitalise on System1's current market opportunity to deliver shareholder
value, including considering the value it can create in its current form, the
options for increasing organic growth through forming partnerships, and
external or internal investment to grow revenue by leveraging the significant
investment made in automated predictions technology. The initial conclusions
of the Review are expected to be ready by the end of November.  The Board has
decided to postpone the currently planned tender offer and the current share
buyback programme, with decisions on future returns of capital being
considered as part of the overall Review.

 

The Review will be led by the Company's independent Non-executive Directors,
supported by the Company's retained advisor, Canaccord Genuity, with another
adviser/s if required.

 

The Board has also today separately announced the appointment of Conrad Bona
as a non-executive director of the Company.

 

This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations 2019/310. Upon the publication
of this announcement, this inside information is now considered to be in the
public domain and the Company confirms that it currently has no inside
information.

 The Company can be found at www.system1group.com
(http://www.system1group.com/) .

 For further information, please contact:

 System1 Group PLC                                            Tel: +44 (0)20 7043 1000
 John Kearon, Founder and Chief Executive Officer
 Chris Willford, Chief Financial Officer

 Canaccord Genuity Limited (Nominated Adviser & Broker)       Tel: +44 (0)20 7523 8000
 Simon Bridges / Andrew Potts

 

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